China’s economy exceeded expectations in the first quarter of the year, driven by a combination of policies and increased demand. The country’s GDP expanded at a 5.3% annual pace in January-March, surpassing analysts’ forecasts of 4.8%. Compared to the previous quarter, growth increased by 1.6%. Despite struggles to recover from the impact of the COVID-19 pandemic, China’s economy showed resilience in the face of challenges such as a slowdown in demand and a property crisis.
Industrial output for the first quarter increased by 6.1% compared to the same period last year, while retail sales grew at an annual pace of 4.7%. Fixed investment also experienced growth, up 4.5% compared to the previous year. This growth was supported by strong performance in manufacturing, increased household spending during the Lunar New Year holidays, and supportive policies aimed at boosting investments.
Economist Louise Loo of Oxford Economics emphasized that while first quarter growth was robust, there are signs of weakness in March following the Lunar New Year holidays. External demand conditions also remain unpredictable, as evidenced by a decline in export figures for the month. Factors such as inventory adjustments, normalization of post-holiday spending, and cautious stimulus measures will influence growth in the second quarter.
In response to economic challenges, policymakers have implemented a range of fiscal and monetary policy measures to stimulate growth. China has set a GDP growth target of 5% for 2024 as part of its efforts to support the economy.